Derivatives are financial instruments which trade based on the value of one or more other instruments. Those instruments from which the derivatives gain their value are referred to as “underlying securities,” “underlying instruments,” or “underlying.” In addition to the underlying securities, traders value derivatives based on their specification, time until expiration (which can be long or short term), market interest rates, any relevant cash flows, and the market's demand (or lack thereof) for that derivative. Derivatives may trade on their own, such as exchange traded futures and options, or as part of another instrument, such as a convertible bond.
Database systems have been previously developed to provide financial market information. In particular, previously developed systems are available for providing the value of a particular stock or bond on a particular date or to plot the fluctuations of that value over a range of dates. From the viewpoint of derivatives market traders, however, these previously developed systems are inadequate and/or problematic. For example, the information output by these systems is not very useful to traders in that they do not provide data on all relevant derivatives organized by relation to the market price and expiry of the underlying instrument. In addition, the organization of derivatives having different expiry dates is poor.
There is a clear need for a system which supplies option trading data in a form which is simple for options traders to review and analyze.